Business leaders now believe that there are many preventive measures, which should be leveraged to diminish market failure. The boards and business leaders now accept their role in building institutional integrity capital. This, in turn, makes sure that the managers are capable of managing the ethical perspectives in business decisions. There is, however, a critical role of middle managers in believing the need for change and to be champions of that change.
According to Corporate Executive Board (CEB) research, organizations with integrity capital have low misconducts and more reporting, when employees do witness wrongdoing. Integrity capital is embedded in the culture and it is not a matter of control. It can shape employee behavior, including defrauding the company or offering bribes to get business.
Their research identifies five key factors in building organizational integrity −
● Management takes action in case of misconduct
● Employees can speak up about misconduct and don’t fear retaliation
● Senior leaders and managers respect employees
● Managers hold employees accountable
● High levels of trust exist among colleagues
However, inculcation of an integrity system takes time and requires commitment. The culture of integrity is better than the regime of compliance.